Satellite Services, Inc., B-288848.3, April 28, 2003

B-288848.3 Apr 28, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Is denied where agency reasonably based its decision on the cumulative impact of uncertainty generated by pending agency management decisions with the potential to substantially affect the solicitation's workload. To obtain a cost comparison between performance by the government and performance by the private sector under what was then known as the Redstone Arsenal Support Activity (RASA) multi-function study. At issue in this RFP were services RASA provided to the Directorate of Logistics. The corresponding cost comparison showed that the in-house offer was approximately $7.9 million lower than SSI's cost of $77. After SSI's administrative appeal of this decision was denied. The Army implemented its proposed corrective action and conducted a second cost comparison under which the cost of in-house performance was found to be approximately $3.7 million lower than SSI's cost. View Decision Satellite Services, Inc., B-288848.3, April 28, 2003 * REDACTED DECISION DIGEST Attorneys DECISION Satellite Services, Inc. (SSI) protests the Department of the Army's decision to cancel request for proposals (RFP) No. DAAH03-99-R-0027, issued in conjunction with a commercial activities study pursuant to Office of Management and Budget (OMB) Circular A-76; to revise the agency's requirements; and to issue a new solicitation based upon those revised requirements for the provision of multi-function services to the Redstone Arsenal in Alabama. SSI, which prevailed in the private-sector competition and has twice challenged the Army's tentative decision to retain in-house performance of the work, argues that the cancellation decision lacks a reasonable basis. We deny the protest. BACKGROUND The Army issued this RFP on November 29, 1999, to obtain a cost comparison between performance by the government and performance by the private sector under what was then known as the Redstone Arsenal Support Activity (RASA) multi-function study, conducted pursuant to OMB Circular A-76. /1/ The RFP explained that RASA provided a wide range of installation support services to the U.S. Army Aviation and Missile Command (AMCOM) and various other offices located on the Redstone Arsenal or in the Huntsville, Alabama area. Performance Work Statement (PWS) Sec. C.1.2. At issue in this RFP were services RASA provided to the Directorate of Logistics, the Directorate of Public Works, and the Directorate of Flight Operations, and certain services associated with managerial and administrative functions. Id. Secs. C.5, C.1-C.4. The solicitation, issued as a small business set-aside, anticipated the award of a cost-plus-award-fee contract to be performed over a base period and option periods that might extend for as long as 10 years. After a private-sector competition that elicited offers from three firms, the Army selected SSI's proposal as that offering the best value to the government for purposes of the cost comparison. The source selection authority (SSA) ultimately concluded that the in-house offer /2/ met the PWS requirements and offered the same level of performance and performance quality as did the SSI proposal. The corresponding cost comparison showed that the in-house offer was approximately $7.9 million lower than SSI's cost of $77,827,968 (after inclusion of the various adjustments called for in Circular A-76), and the Army issued its tentative decision to retain performance of these services in-house on June 14, 2001. After SSI's administrative appeal of this decision was denied, the firm filed its initial protest in our Office, arguing that the in-house offer failed to include adequate management and supervision for personnel proposed to accomplish the PWS requirements and that the in-house offer did not represent a level of service comparable to the level of service proposed by SSI. On the morning of November 13, the day of a scheduled GAO hearing in the matter, the Army and SSI agreed that the Army would take corrective action by revising the MEO to capture the workload, including all management and supervision of all PWS sections, and by reviewing the resulting in-house offer to ensure that it exhibits the same level of performance and performance quality as did SSI's offer. In view of the Army's proposed corrective action, our Office dismissed SSI's protest as academic. The Army implemented its proposed corrective action and conducted a second cost comparison under which the cost of in-house performance was found to be approximately $3.7 million lower than SSI's cost, and in June 2002 the Army therefore made a tentative decision to retain in-house performance of the requirements.